Why are Liberals Afraid of Social Security Reform

For those of you who don't understand the ins and outs of social security, I have given you a cliff note version below.

Currently, 7.65% of your paycheck (with a cap of 70,000) is diverted to the Social Security Administration. Your employer also pays 7.65% for grand total of 15.30%. When your money goes in the front door of the Social Security Admin it isn't placed in an account that you can assume will be there when you get old. A large portion of this money is immediately diverted to those who are collecting Social Security Checks. The surplus of this money is sent to the US Treasury, where it still doesn't go into an account. This money is spent on every day government programs. The Treasury basically issues an IOU for the amount of money in the form of US Treasury Bonds.

You might have heard that the Social Security system currently takes in more money than it pays out in order to try to handle the baby boomer problem. What happens with the excess money the system collects? The Social Security system buys U.S. Treasury bonds with the surplus. Essentially, the government (in the form of the Social Security Administration) loans the surplus to itself.

In future decades, when it comes time to start drawing on the collected surplus, the government will pay itself back through tax revenue (or additional borrowing). The Social Security system will start cashing in the bonds, and the government will have to make good on them with tax revenue and by cutting benefits.

"There is no Social Security trust fund. There are only IOUs. We have only the guarantee of the government, which is fine except how is the government going to get the money - cut benefits, extend the eligibility age? And we have to do something to allow people to get more than 2 percent return on the money they are putting in each year. If this were a private company [doing this], the government would be arrested." -- Art Linkletter

So why does the prospect of privatization of Social Security scare liberals? This should be fairly obvious.

Privatization would allow Americans to invest up to 4% of their annual income into private retirement accounts. This, first of all, gives people way too much power over their own future for a liberal. Liberals feels that government should be involved in every aspect of the well-being of it’s constituents. Secondly, giving the option of investing your money into a private account would take the money out of the hands of the democrats who spend it on God-knows-what. This terrifies them.

We have a huge problem before us.

I have included some links below to let you see for yourself. The Heritage.org link will allow you to put in your age, and see all the money you will be losing when you begin receiving Social Security benefits v. if you had invested the money into a private account.

http://apnews.myway.com/article/20041208/D86R7AE80.html

http://www.newsmax.com/archives/ic/2005/2/7/212533.shtml

http://www.heritage.org/research/features/socialsecurity/